Published on: May 22, 2012
The killing of Trayvon Martin, an unarmed black teenager, by the head of a neighborhood watch group, has focused a harsh spotlight on these increasingly popular community-based crime prevention organizations. The incident, which has attracted national attention, has also raised questions about whether community associations should sponsor watch groups directly and whether, in fact, they should encourage these groups to operate in their communities at all.
The details of this incident are well known. While patrolling in a gated community in Stanford, Florida, George Zimmerman, the watch group captain, called police to report that he had spotted someone behaving suspiciously. Zimmerman then followed the “suspect’ (Martin), ignoring the police dispatcher’s instructions not to do so. A confrontation of some kind ensued, during which Zimmerman shot and killed the young man, who, it turned out was simply returning from a neighborhood store to the home of the friend he was visiting.
The incident is tragic by any definition and in any context. What makes it particularly relevant for community associations is the setting: The gated community (The Retreat at Twin Lakes) is governed by a homeowners association, which will almost certainly be sued by Martin’s family, seeking damages for his wrongful death. For that reason, community associations generally, and those with neighborhood watch groups in particular, have more than an academic interest in what happens.
While it is impossible to predict how a judge or jury will decide this or any case, it is possible to identify the issues that will determine the outcomes, both legal and financial – for the HOA. The key legal question: Does the community association have any legal responsibility, direct or indirect, for Zimmerman’s actions? The key financial question: Will the association’s insurance policy cover its defense costs and any damages awarded, and will that coverage extend to Zimmerman as well?
Near or Far
Starting with the legal questions, the HOA’s liability, if any, will depend on the nature of its relationship with the watch group. The more distance between the association and the watch group, the stronger the association’s defense is likely to be. Unfortunately for this HOA, press reports indicate that it sponsored the watch group and sanctioned its activities. If so, then the association also arguably had an obligation to supervise the group and control the actions of its members. Did board members screen Zimmerman before designating him, or allowing him to designate himself, as watch captain? Were they aware, or should they have been aware, of issues in Zimmerman’s background – including a history of violent behavior – that might have raised red flags? Did board members know Zimmerman carried a gun on his patrols, and if so, did they condone or ignore that behavior?
These are some of the legal questions that will determine whether and to what extent the association will be found to share in the responsibility for Trayvon Martin’s death.
The insurance questions are also complex. The industry executives I consulted – Robert Masse, with W.T. Phelan & Co. Insurance Co., Inc.¸ and Joel Meskin, vice president in charge of community association products for McGowan & Company, Inc. ― identified three possible sources of coverage:
- Zimmerman’s individual unit owner’s policy
- The board’s Directors and Officers (D&O) liability policy
- The HOA’s commercial general liability (CGL) policy
“Unintended and Unexpected”
The liability coverage in Zimmerman’s policy would apply, Meskin says, only if his actions were “unintended” or “unexpected.” Damages that are intended or expected are specifically excluded. While Zimmerman may be able to argue that the shooting was accidental, it will be difficult for him to maintain that it was an entirely “unexpected” consequence of carrying a gun, making coverage from this source, in Meskin’s view, highly unlikely.
The D&O policy won’t be any help, Meskin and Masse agree, because its language specifically excludes coverage for bodily injury and property damage.
This leaves the association’s CGL policy, which doesn’t exclude bodily injury, and which, depending on its wording, may provide coverage for both the association and volunteers engaged in association-sanctioned activities. But like Zimmerman’s unit owners’ policy, the CGL policy provides coverage only if the events were unanticipated or accidental, so Zimmerman is probably out of luck here, too.
Coverage for the association will depend on two key questions, Meskin explains:
- Was the watch group an association-sponsored entity; and
- Did the association have the authority to create it?
If the condominium documents don’t authorize the watch group specifically or authorize security activities generally, Meskin notes, then the insurer may deny coverage on that basis. The “intended or expected” exclusion would not apply, however, he explains, because board members did not themselves shoot Martin and weren’t directly involved in that incident.
But that doesn’t mean they had no responsibility for it. Meskin thinks the association will be found guilty at a minimum of “negligent supervision.” That would be the finding, he suggests, if board members failed to monitor the watch group at all or if they had prior knowledge that Zimmerman had violated the group’s procedures or exceeded the limits of its authority in the past and had failed to act on that information. And if the evidence shows that board members knew Zimmerman was armed and either approved or failed to forbid it, Meskin says, “that would [infuriate] any jury in its right mind.”
The association’s insurance may end up covering the defense costs and the damages awarded. But if the award exceeds the limits of the association’s policy and any umbrella coverage supplementing it, Meskin notes, “the rest will come out of a special assessment on owners.”
That prospect should provide a loud wake-up call and a strong caution to all community associations. But it also produces some conflicting advice about how they should respond. “There are no clear or comfortable answers,” Masse points out
To Watch or Not
Watch groups have many benefits: They deter crime, they encourage residents to focus on safety issues, and they promote a “neighbors looking out for neighbors” mentality that is healthy and desirable in any community. But as the Trayvon Martin tragedy illustrates clearly, watch groups also create enormous potential liability risks for community associations that sponsor them. Thomas Skiba, chief executive officer of the Community Associations Institute (CAI), emphasized those risks in a statement issued shortly after Martin was killed:
“Community associations should proceed very carefully before they decide to create or manage a neighborhood watch program or before they even formally endorse a watch program organized by residents,” Skiba advised.
Purely from a liability standpoint, the safest course of action for a condominium association is to avoid either establishing or sponsoring a neighborhood watch group and to emphasize the independence of any group operating within the community. Don’t let watch group members use association equipment and don’t allow them to identify themselves in any way, through association logos, uniforms or statements, as association representatives.
If owners want to organize an independent watch group, the board should notify the local police department and invite a representative to meet with the organizers. But the board’s involvement should end there. The organizing meeting should be run by police representatives and group members, not by members of the board. The board should not direct, endorse or promote the watch group in any way.
Some industry executives say the association can’t effectively distance itself from a watch group and shouldn’t try. It is better for the association to organize and control the group, they suggest, because anyone who sues the group is going to sue the association, too, regardless of the independence claim.
I agree with half that argument – there is nothing the association can do or not do to avoid being sued. But it can reduce its liability risks. An association that sponsors a watch group assumes an array of duties — to screen and oversee group members, for example – that it would not otherwise have. The association sponsoring a watch group owns the group’s actions and liability for them. An association that maintains its independence is no less likely to be sued, but it will have a stronger defense against liability claims.
Our advice to associations that don’t currently have a watch group is – don’t invite trouble and create liability risks by establishing one. If a community already has an association-sponsored watch group, there is no need to panic and disband it. But the board should carefully review its structure, its operating procedures and its membership. We suggest the following:
- Make sure the association has the authority to establish a watch group. If the condominium documents do not establish that authority, obtain the required super majority vote of owners to amend the documents accordingly. If the documents require the association to provide security, consider whether a watch group is the best way to fulfill that duty. The board might be better-advised to hire a professional security firm, with its own liability insurance and a contract indemnifying the association.
- Make sure the watch group is working closely with local law enforcement officials
- Establish clear guidelines, if you don’t already have them, defining the purpose of the watch group and specifying the scope and limits of its activities. The association’s guidelines (which should be in writing and reviewed by the association’s attorney) should make it clear that, as one commentator observed, the watch group is “the eyes and ears of a crime prevention program, but not its muscle.” The guidelines should also:
- Instruct volunteers to report suspicious activity or suspicious individuals but make no attempt to follow, apprehend, or otherwise engage them. You don’t want volunteers to hurt anyone, or to be harmed themselves.
- Prohibit volunteers from carrying weapons of any kind.
- Require volunteers to complete a training program (many law enforcement agencies provide training for watch group participants)
Board members should also check the backgrounds of watch group volunteers and exclude anyone whose past history, like George Zimmerman’s, suggests possible cause for concern. If the association is sponsoring the group, the board needs to know who the members are as well as what they are doing.
Most important, if the community has a sponsored watch group, and certainly before establishing one, make sure the association’s insurance will cover it. Also make sure your insurance carrier is aware that the group exists or is being formed, and request a letter affirming that the group’s activities are covered.
Meskin predicts that insurers currently covering watch group activities will reprice the coverage and probably begin excluding it. So if you have the coverage today, you can’t assume it will be available at the same price, if at all, in the future. Associations that have a watch group should reaffirm the coverage for it every time their insurance policy is rewritten or renewed.
Any association that has a watch group or is contemplating one has to consider the potential liability risks the association and its members are incurring. But boards should be concerned not just about reducing liability but, even more, about preventing the tragedy that might create it.